An MBA for $22,000 from your bedroom?

Fully accredited, purely online, MBA from The University of Illinois – $22,000

Where do people receive their education?  In schools and universities, right?  But why not from the comfort of your own home, through rich online media content that can replicate the classroom experience?

This is the challenge that many educators and online course providers have accepted.  At primary and high school level, there are clearly some social and emotional aspects of learning and development that take place in a brick and mortar school – so let’s put that aside for a moment and just consider higher, degree level education – can that be delivered just as effectively online?  And how does this go down with universities, what do they stand to lose or gain?

Traditional universities and academic institutions provide value to students essentially because the faculty has a set of particular expertise, the institution possesses some valuable proprietary material and the campus buildings provide a place where access to these things can be structured and provided – ultimately resulting in a degree qualification that can be of enormous value to the student.  The business model of private schools and universities is fairly straightforward at a high level.  The total revenue collected in tuition fees must cover the salaries of faculty (normally the major cost) plus any other operating costs.  When you boil this down to the simplest “school” imaginable, with one physical classroom, one teacher and any given number of students, the revenue and cost drivers of the “business” are clearer to see – maximising earnings is achieved by sweating key assets (namely the classroom and the teacher) by filling the classroom with as many fee-paying students as possible without compromising quality.

When this is translated into the online environment, the economics look even more appealing – with the same teacher’s expertise, we can reach anyone in the world with an internet connect because we are not limited by having to be in a physical space of constrained size.  A single “classroom” is now accessible to thousands if not millions of fee-paying students – courses delivered online in this way are called MOOCs (Massive Open Online Course).  Universities have, to varying degrees, experimented with turning their traditionally classroom based courses into MOOCs that consist of filmed lectures, animated videos, interactive digital content, articles, graphics, discussion threads, written assignments and quizzes.

Some organisations aim to provide MOOCS on a not for profit basis for research purposes (one large example being the Harvard/ MIT collaboration called EdX – ) while others like Coursera ( are attempting to make a profitable business providing MOOCs.  Coursera partners with universities from all over the world in its attempt to be a one-stop-shop for any course a student might want to take – they currently have 147 partners (including Stanford, Princeton, UPenn, UMich) across 29 countries offering 1,888 courses [1].  What’s interesting about Coursera’s business model is that all courses are available to anyone for free, but if you want any certification for having taken or passed a course it could cost you between $30 and $100 [2].  Other possible revenue streams for the business could “include introducing students to potential employers and recruiters (with student consent), tutoring, licensing, sponsorships and tuition fees” [3].

For universities, this is a completely new potential revenue stream and addition to their business model, whether it be either licencing their content to businesses like Coursera or charging students directly.  It does, however, come with significant challenges.  For a start, uploading existing powerpoint presentations and videos of traditional classroom lessons doesn’t cut it – students demand more and online pedagogy is very different to that of the classroom, leading to very high course production costs.  The second major difficulty is assessment and accreditation, a crucial end product from taking any educational course – how does one teacher, or even one faculty body assess the learning progress of millions of students?  One solution is the use of self-marking quizzes and peer assessment, but is this a rigorous enough basis upon which to award a degree?

Some people think MOOCs have had their day [4], while many universities and companies like Coursera continue to pursue the model.  The University of Illinois offers a purely online and fully accredited MBA through Coursera for about $22,000 ( – would you consider that option for the fraction of the cost of a traditional MBA?  In the shoes of an employer, would you value the two qualifications equally?







Word count:  721


Mindtree: Leading the Digital Charge


Do Android Phones Dream of Electric Sheep?

Student comments on An MBA for $22,000 from your bedroom?

  1. I’ve taken a number of online graduate courses over the last few years. Several were requirements for career advancement, two others were taken to provide a leg up on b-school applications. None of those courses offered me anything I couldn’t have taught myself with the aid of Wikipedia and a few textbooks from Amazon.

    Last night I had a conversation with a friend about the real value add of a resident MBA program. Is it how to build a DCF and calculate a company’s NPV? Surely not, you can learn all of that from for free. What about management case studies filled with examples of effective and ineffective leadership? Nope, 99% of successful CEO’s eventually write a book filled with good leadership advice, and must people experience the joy of working for a terrible boss at least once or twice.

    I think the value of a resident MBA is comprised of two main things: 1) the opportunity to build relationships with faculty and peers who are, or will someday be, at the top of their fields, and 2) the opportunity to practice communicating complex ideas clearly and concisely on demand (I’m looking at you cold calls!). Both of those are REALLY hard to accomplish from behind a computer screen and keyboard. Business is at least half people skills, and a business education that eliminates that aspect is a tough sell at any price.

  2. Great post! I think the biggest challenge online universities will face is getting people to take them seriously. In general, I think most people view online degrees as far less respected than a classroom-based degree. I was very skeptical of online learning until I took a Kaplan GMAT course last summer. I was extremely impressed by Kaplan’s ability to make the course highly interactive, even while being all online. In some ways I felt like I was more on-my-toes than if I were in a lecture based class and because I lived in a small city (Madison, WI), taking an online course opened up many more option to me than if I’d chosen an in person course. That said, my GMAT course was mostly content based, whereas a degree like an MBA is develop ways of thinking rather than content memorization. I’m concerned that would be harder to teach online, but actually have a fairly optimistic view and think in an increasingly globalized world, online education will be more common. Rather than going all online, I think it would work better to offer a hybrid program where a cohort of students gets to know each other in person over several weeks before completing coursework online.

  3. I think online platform for education can be successful in targeting a clear segment of the market – people who want to advance their career but don’t have too much time and money to spend on full-time program. It can also partner with employers to provide training program for employees. I don’t think online learning is the most effective way to learn (I have to admit that I never finish a Coursera course before), but it offers clear value to people who change jobs, get a promotion or simply learn new things during their spare time.

  4. Thanks for sharing on this topic! I am a firm believer that nearly everything academic that we learn in our MBA could be achieved with a $10 library card or an internet connection, what I find interesting is how employers will view those with online MBA’s… As can be seen by the fact that we are being recruited for summer/full-time positions within the first couple months of HBS, we see that companies are not as interested in what we have learned as they are the fact that HBS picked us out of a group of peers to attend the program. Large firms are basically able to de-risk their hiring decisions by the fact that HBS, and other top schools, have already vetted us to be in the program.
    With the limiting factor of an online MBA being the spending limit on your credit card, it will be increasingly difficult for future employers to rely solely on the location of the program as a proxy for the potential future success of that student… Could these online programs further increase the value of an in-person MBA?

  5. Such an interesting topic. Have a couple of thoughts on online learning courses. HBx made me a believer in online learning. The classes were interactive, challenging and robust. I learned a lot but I think the basic element of the MBA is lost with just focusing on the knowledge component of it. So much of the educational experience is driven by the other elements: relationships with peers & faculty, extra-curricular activities, attending other lectures, etc. I think that online courses also run the small but real risk that the student might circumvent the system and cheat. Finally, the perception aspect is real. I think that online programs will continue to grow, but will never truly substitute the real-class learning experience.

  6. Interesting topic! I don’t think the online MBA will ever be valued equally compared to a traditional MBA—I also don’t think that’s a bad thing. I have found that students choose their business school path, whether it be full-time, part-time, or online, according to what they’re trying to get out of the experience. I’ve found that full-time MBAs tend to demand the most out of their experience inside the classroom and out. Part-time students on the other hand are looking for a balance between their classroom experience and work life. Online MBAs tend to focus on the credential itself. Each motive is valuable, but they’re different. I don’t think that students considering full-time MBA would consider a online to be an equivalent substitute and vise versa—a student considering an online business program would probably not look to consider a full-time MBA. I believe there will always be demand for every path and that demand for online MBAs will grow—especially as they start to benefit from the success of their alumni. In the end, it will be up to the employer to scrutinize schools according to what they’re looking for in their future employees.

Leave a comment